Autumn Statement 2023: what's happening to universal credit and other benefits?
In today's Autumn Statement, Chancellor Jeremy Hunt announced uplifts to benefits for the 2024-25 financial year, but also introduced heavier sanctions for those who don't look for work.
While the increases to benefit payments confirmed today will offer some relief to those struggling with the cost of living crisis, they are coupled with strict sanctions and requirements for claimants.
Here, we unpack the Chancellor's announcements to see what difference it will make to your wallet.
- Find out more: what the Autumn Statement means for your money
Universal credit and other benefits raised by 6.7%
Benefits for working-age people will increase by 6.7% from April 2024, including universal credit (UC) and means-tested ‘legacy benefits’ like personal independence payment (PIP) and employment and support allowance (ESA).
This increase is in line with September’s rate of inflation, contrary to suggestions that the Chancellor would only increase benefits in line with October’s lower rate of 4.6%.
Universal credit: current and new amounts
The below table shows how much you would get as a monthly standard allowance now, and from April 2024 onwards – it does not consider additional components of universal credit like the housing or childcare elements.
| Age and household status | 2023-24 monthly standard allowance | 2024-25 monthly standard allowance |
|---|---|---|
| If you're single and under 25 | £292.11 | £311.68 |
| If you're single and 25 or over | £368.74 | £393.45 |
| If you live with a partner and you're both under 25 | £458.51 (for both) | £489.23 (for both) |
| If you live with a partner and either of you are 25 or over | £578.82 (for both) | £617.60 (for both) |
- Find out more: How much Universal Credit will I get?
State pension increased by 8.5%
Despite rumours that the Chancellor would alter the triple lock to increase the state pension by a smaller amount, he announced an increase by 8.5%, in line with average wage growth, as guaranteed by the triple lock.
For someone who hit state pension age before April 2016 their full weekly basic state pension would rise from £156.20 to £169.50.
For someone on the full new state pension this means their weekly payment will go from £203.85 to £221.20 from April.
Basic state pension recipients would get up to £690 more for a single person, and £1,104 more for couples over the year compared to 2023-24.
New state pension recipients would get up to £902 more.
- Find out more: Chancellor confirms bumper state pension increase of 8.5% alongside new 'pot for life' proposals
Local housing allowance unfrozen (briefly)
The Chancellor announced an increase to local housing allowance (LHA) to the 30th percentile of local rents in April 2024, putting an end to the freeze on rates that has been in place since 2020.
LHA is used to calculate the amount of housing benefit or housing element of universal credit tenants are eligible to receive. It varies by area and number of people in a household.
The '30th percentile' means that recipients of housing benefit or the housing element of universal credit would be able to afford the cheapest 30% of homes for their size of household in their area.
In the 12 months to October 2023, private rents rose by 6.1% on average in the UK to an all-time high.
Despite the announcement that LHA rates will be unfrozen to offer relief to renters, the Office for Budget Responsibility (OBR) have confirmed that rates will be frozen again from April 2025.
Harsher sanctions
The Chancellor also shared his plans to increase sanctions on people claiming benefits who are not fully engaging with Jobcentre plans.
The government will begin tracking the attendance of each claimant at job fairs and interviews that have been organised by Jobcentres.
The government's Restart scheme, which includes coaching, CV and interview skills, and training sessions, will be extended to include people who have not found a job after six months on universal credit, instead of the current nine months. Work coaches will track the activity of people in the Restart scheme to make sure they comply with the scheme's requirements.
After a year without finding a job, people claiming universal credit will be put into a mandatory work placement that the Chancellor says will increase their skills and improve employability.
If a claimant is on an 'open-ended sanction' for more than six months, their benefits will be stopped entirely and their case closed. These people will also be denied free NHS prescriptions and legal aid.
Changes to benefit assessments
Work capability assessments (WCAs) will be changed to consider if a person could work from home, which the government believes will reduce the number of people being accepted for disability benefits.
If you register for disability benefits – like personal independence payment (PIP) – you are tested to see if you are completely unable to work, or have a limited capability for work.
These assessments will look at a person's physical and mental health, and how this might get in the way of their ability to work.
If the assessor feels that you could physically do some kind of work, you will be instead be considered a job seeker and be required to prove you are actively looking for a job.
